January budget booms to NIS 3.9 billion surplus on tax revenues

Overall 2016 budget plans a NIS 35 billion deficit, amounting to 2.9% of GDP.

By
February 8, 2016 18:51
1 minute read.
Moshe Kahlon

Kulanu leader Moshe Kahlon. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later

The Finance Ministry's January budget report, which typically exhibits a surplus for seasonal reasons, showed a hefty NIS 3.9 billion surplus resulting from unusually high tax revenues.

The overall 2016 budget plans a NIS 35 billion deficit, amounting to 2.9% of GDP. The rolling deficit over the last 12 months stood at just 2.2% of GDP, higher than the final deficit for 2015, which stood at 2.15% of GDP.

Be the first to know - Join our Facebook page.


The revenue haul for the month came out at NIS 27.4 billion, a nominal 7.8% higher than last January. Expenses came out at NIS 23.8 billion, plus another NIS 4.3 billion in debt payments and 0.1 billion in National Insurance payments.

One of the main drivers of January's high revenues was a bump in imported vehicles. The contrast with last January was particularly wide because vehicular imports were low at this time last year. Direct tax revenues were up 4%, and indirect tax revenues up 17%. Taxes on real estate transactions were up 29% over last January, and the state took in higher revenues from businesses and VAT, despite lowering both rates.

The revenues will be welcome news to Finance Minister Moshe Kahlon, who may have extra leeway to spend when unexpected events pop up during the year.

He may face pressure from the Bank of Israel to bring down the deficit, which is higher than Israel's projected growth for the year. The Bank noted that Kahlon raised the target to 2.9% target from 2%. If the new target is met, the bank noted in a recent report, "this deficit level is not consistent with a reduction of the debt to GDP ratio."

Growing the debt burden would break a positive trend in Israel's fiscal performance.

JPOST VIDEOS THAT MIGHT INTEREST YOU:


Moody's recently applauded Israel for being the only rated sovereign other than the Phillipines to show consistent reductions in its Debt-to-GDP ratio in the past six years. The debt-to-GDP ratio fell to 64.9 percent at the end of 2015, from 66.7 the year before.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

Workers strike outside of the Teva building in Jerusalem, December 2017
December 18, 2017
Workers make explosive threats as massive Teva layoff strikes continue

By MAX SCHINDLER